EU rules could allow small businesses to sue tech giants

Platform owners must outline clearer terms and conditions for developers and small businesses

European Union (EU) rules proposed this week could allow developers and small businesses to sue platforms like Google, Apple and Amazon if they fall short of tighter competition standards.

Targeting app stores, search engines, and e-commerce sites, new regulations put forward by the European Commission (EC) aim to create a "fair, transparent and predictable business environment for smaller businesses and traders" by forcing tech giants to adopt healthier digital business practices.

The owners of 'online intermediation services' such as Apple's App Store must ensure their terms and conditions are clear, transparent and easily available, while setting out clearly why a professional user has been suspended, demoted or delisted from their platform. They must also adhere to a minimum notice period for changing terms and conditions, while being required to set up an internal complaints procedure.

Meanwhile, app developers and small businesses who rely on these platforms, such as hotels and online traders, will be handed the power to collectively sue the owners if they fail to comply and are unable to deal with any disputes 'in-house'.

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Collective redress in this form has only previously been available to consumers, but, subject to the rules being approved by the European parliament and member states, businesses will be allowed to be represented in court by industry groups or non-profit organisations.

"Millions of mostly small traders in the EU now depend on online platforms to reach their customers across the Digital Single Market," EU vice president for the Digital Single Market Andrus Ansip said.

"These new online market places drive growth and innovation in the EU, but we need a set of clear and basic rules to ensure a sustainable and predictable business environment.

"Today's proposal brings more transparency to the online economy, gives businesses the predictability they need, and will ultimately benefit European consumers."

Mariya Gabriel, commissioner for the Digital Economy and Society, noted: "Platforms and search engines are important channels for European businesses to reach consumers but we must make sure they are not abusing their power, and thus bring harm their business users.

"We are taking a very important step with clear rules on transparency, efficient dispute settlement and the launch of an observatory to analyse online platforms' practices in greater detail. Ensuring that platforms and search engines treat other businesses fairly is critical including for promoting trust in online platform environment in the EU." 

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Streaming services such as Spotify, according to reports, have been pushing for European legislation in this vein for months, with president Jean-Claude Juncker initially hinting at new laws in his State of the Union address last September, stating intentions to "safeguard a fair, predictable, sustainable and trusted business environment in the online economy".

The EU, meanwhile, also announced plans this week to boost funding for AI and promote data sharing within the digital single market, with such proposals comprising part of its wider attempt to grapple with the quagmire of regulating big tech, and raising the standard of businesses practices in the digital economy.

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